AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 4/6 · 28/10/2026
Moat50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 2/4 · Multiple reinforcing intangibles are evidenced: active patenting across product families, a premium brand delivered via a multinational mobile van channel, and expansion of proprietary diagnostics/repair data through acquisition. These support differentiation but occur within industries the company characterizes as intensely competitive.
durability · 2/4 · Breadth of IP (no single patent material to revenue) and capability expansion via acquisitions support persistence, but the company expects high competition to continue, requiring ongoing innovation and execution.
customer dependency · 2/4 · Extended‑term, secured finance and lease structures (typical ~4‑year finance; contracts up to 10 years; leases up to 5–7 years) imply ongoing engagement and switching frictions during contract terms, though post‑term retention is unquantified.
erosion resilience · 2/4 · Gross margin benefited from RCI/mix and Tools showed improvement in 1H26, indicating some resilience; however, Tools operating margin fell notably in Q3’26 and the company warns competition will stay high.
Pricing power—
Insufficient evidence for every rubric criterion; no category score is inferred.
realized pricing · 1/4 · Filings warn of intense price competition and state that premium pricing depends on maintaining a premium image; reported growth does not isolate price effects from volume/mix.
retention · 2/4 · Multi‑year finance and lease terms, secured by equipment, suggest repeat interaction and lower propensity to switch during contract periods; specific renewal/retention metrics are not disclosed.
margin resilience · 2/4 · RCI savings offset costs in 2025 and 9M26 gross margin improved, but Tools margin compressed in Q3’26, showing mixed resilience under competitive and cost pressures.
contractual freedom · — · The passages do not disclose broad pricing discretion or constraints (e.g., long‑term fixed‑price obligations) beyond normal product sales and financing terms.
Predictability93
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 75.00
- Revenue growth volatility (pp)
- 2.74
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 3.80
Financial strength99
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 97.43
- netDebtEbitGrade
- 100.00
- interestCoverageGrade
- 100.00
- currentRatioGrade
- 100.00
- Debt / FCF (x)
- 1.18
- Net debt / operating income (x)
- -0.33
- Interest coverage (x)
- 26.29
- Current ratio (x)
- 4.79
Capital allocation—
Missing required inputs: operatingReturn. Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year average dilution (%)
- -0.69
- 3-year average SBC / revenue (%)
- 0.73
- cashConversionGrade
- 100.00
Management56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Balanced uses of capital are evidenced: no revolver borrowings, long‑dated fixed notes, ongoing repurchases, and bolt‑on acquisitions aligned with strategic adjacencies; return hurdles are not disclosed.
incentive alignment · 3/4 · Performance awards tie to revenue growth and RONAEBIT; actual FY2025 consolidated bonus component paid zero; clawback and anti‑hedging policies are in place, indicating alignment and accountability.
execution · 2/4 · Operations show mixed execution: modest organic decline in 2024, slight organic growth in 2025, 9M26 sales growth with gross‑margin improvement, but Tools margin declined in Q3’26.
governance · 2/4 · An independent Lead Director role and annual board evaluations are in place; the CEO also serves as Chair, limiting evidence for stronger independent oversight.
Evidence
Snap-on vigorously pursues and relies on patent protection to safeguard its intellectual property and position in its markets.
Item 1: Business – Patents and IP · Filed 12/02/2026
As of 2025 year end, Snap-on and its subsidiaries held approximately 945 active and pending patents in the United States and approximately 3,590 active and pending patents outside of the United States.
Item 1: Business – Patents and IP · Filed 12/02/2026
Examples of products that have features or designs that benefit from patent protection include hand tools, power tools, wheel alignment systems, wheel balancers, tire changers, vehicle lifts, tool storage, tool control, collision measurement, test lane equipment, brake lathes, electronic torque instruments, emissions-sensing devices and diagnostic equipment.
Item 1: Business – Patents and IP · Filed 12/02/2026
The Snap-on Tools Group consists of business operations primarily serving vehicle service and repair technicians through the company’s multinational mobile tool distribution channel.
Item 1: Business – Segments (mobile tool distribution) · Filed 12/02/2026
The acquisition expands Snap‑on’s capabilities in these growing markets and further strengthens the company’s library of proprietary experienced-based data, as well as its product offerings to support the diagnosis and repair of increasingly complex vehicles and equipment.
MD&A – Recent acquisitions/data capability · Filed 22/10/2026
The acquisition expands Snap-on’s capabilities in these growing markets and further strengthens the company’s library of proprietary experienced-based data, as well as its product offerings to support the diagnosis and repair of increasingly complex vehicles and equipment.
MD&A – Recent acquisitions/data capability · Filed 23/07/2026
The global tool, equipment, diagnostics, and repair information industries are competitive.
Item 1A: Risk Factors – Competition · Filed 12/02/2026
Price competition in our various industries is intense and pricing pressures from competitors and customers continue to increase.
Item 1A: Risk Factors – Price competition · Filed 12/02/2026
Any inability to maintain customer satisfaction could diminish Snap-on’s premium image and reputation and could result in a lessening of our ability to command premium pricing.
Item 1A: Risk Factors – Premium pricing risk · Filed 12/02/2026
If our franchisees are not successful, or if we do not maintain an effective relationship with our franchisees, the delivery of products, the collection of receivables and/or our relationship with end users could be adversely affected and thereby negatively impact our business, financial condition, results of operations and cash flows.
Item 1A: Risk Factors – Franchise network dependence · Filed 16/02/2024
2023 ANNUAL REPORT
13
In addition, if we are unable to maintain effective relationships with franchisees, Snap-on or the franchisees may choose to terminate the relationship, which may result in: (i) open routes, in which end-user customers are not provided reliable service; (ii) litigation resulting from termination; (iii) reduced collections or increased charge-offs of franchisee receivables owed to Snap-on; and/or (iv) reduced collections or increased charge-offs of finance and contract receivables.
Item 1A: Risk Factors – Franchise open routes risk · Filed 16/02/2024
Finance receivables are comprised of extended-term installment payment contracts to both technicians and independent shop owners (i.e., franchisees’ customers) to enable them to purchase tools, diagnostics, and equipment products on an extended-term payment plan, with average payment terms of approximately four years.
MD&A – Finance receivables (~4-year average term) · Filed 22/10/2026
Finance receivables are comprised of extended-term payment contracts to both technicians and independent shop owners (i.e., franchisees’ customers) to enable them to purchase tools, diagnostics, and equipment products on an extended-term payment plan, with average payment terms of approximately four years.
Notes – Finance receivables (~4-year term) · Filed 23/07/2026
Contract receivables, with payment terms of up to 10 years, are comprised of extended-term payment contracts to a broad base of customers worldwide, including shop owners, both independents and national chains, for their purchase of tools, diagnostics, and equipment products, as well as extended-term contracts to franchisees to meet a number of financing needs, including working capital loans, loans to enable new franchisees to fund the purchase of the franchise and van leases, or the expansion of an existing franchise.
Notes – Contract receivables (up to 10 years) · Filed 23/07/2026
Sales-type leases are included in both “Finance receivables – net” and “Long-term finance receivables – net” on the accompanying Consolidated Balance Sheets, with lease terms of up to five years.
Notes – Sales-type leases (up to 5 years) · Filed 16/02/2024
Sales-type leases are included in both “Contract receivables – net” and “Long-term contract receivables – net” on the accompanying Consolidated Balance Sheets, with lease terms of up to seven years.
Notes – Contract receivables leases (up to 7 years) · Filed 16/02/2024
Finance and contract receivables are generally secured by the underlying tools, diagnostics and/or equipment products financed and, for contracts to franchisees, other franchisee assets.
Notes – Receivables secured by underlying products/franchise assets · Filed 23/07/2026
Roper Technologies, Inc.
Stanley Black & Decker, Inc.
Proxy – Peer group (includes Stanley Black & Decker, Inc.) · Filed 12/03/2026
IDEX Corporation
Kennametal Inc.
Lincoln Electric Holdings, Inc.
Proxy – Peer group (includes IDEX Corporation, Kennametal Inc., Lincoln Electric Holdings, Inc.) · Filed 12/03/2026
Peer companies’ revenue and/or market value are within a reasonable range relative to the Company, are direct competitors of the Company and/or have similar business characteristics or compete with the Company for executive talent.
Proxy – Peer group may include direct competitors · Filed 12/03/2026
Gross margin in the first nine months of 50.9% improved 20 basis points from 2025 primarily reflecting favorable business mix and savings from the company’s RCI initiatives, partially offset by higher material and other costs.
MD&A – Gross margin improvement (RCI/mix) · Filed 22/10/2026
The impact of tariffs in 2025 was largely offset by benefits from the company’s RCI initiatives.
MD&A – RCI offset tariffs · Filed 12/02/2026
Six Months Ended
(Amounts in millions)
July 4, 2026
June 28, 2025
Change
Segment net sales
$
994.8
100.0
%
$
953.9
100.0
%
$
40.9
4.3
%
Cost of goods sold
(519.0)
(52.2)
%
(502.2)
(52.6)
%
(16.8)
(3.3)
%
Gross profit
475.8
47.8
%
451.7
47.4
%
24.1
5.3
%
Operating expenses
(255.7)
(25.7)
%
(242.6)
(25.5)
%
(13.1)
(5.4)
%
Segment operating earnings
$
220.1
22.1
%
$
209.1
21.9
%
$
11.0
5.3
%
Segment net sales of $994.8 million in the first six months of 2026 represented an increase of $40.9 million, or 4.3%, from 2025 levels, reflecting a $30.8 million, or 3.2%, organic sales gain and $10.1 million of favorable foreign currency translation.
MD&A – Tools Group 1H26 organic growth and margin · Filed 23/07/2026
Operating margin for the Snap-on Tools Group of 18.0% in the third quarter of 2026 compared to 21.7% last year.
MD&A – Tools Group Q3’26 margin decline · Filed 22/10/2026
Consolidated net sales of $4,707.4 million in 2024 represented a decrease of $22.8 million, or 0.5%, from 2023 levels, reflecting a $40.6 million, or 0.9%, organic decline and $5.5 million of unfavorable foreign currency translation, partially offset by $23.3 million of acquisition-related sales.
MD&A – FY2024 organic sales decline · Filed 13/02/2025
Net sales of $4,743.2 million in 2025 represented an increase of $35.8 million, or 0.8%, from 2024 levels, reflecting a $16.5 million, or 0.3%, organic sales gain and $19.3 million of favorable foreign currency translation.
MD&A – FY2025 sales (modest organic growth) · Filed 12/02/2026
For performance achieved above specified levels, the recipient may earn additional shares of stock, not to exceed 100% of the number of performance awards initially granted.
Notes – PSUs (revenue growth and RONAEBIT metrics) · Filed 22/10/2026
PSUs related to 38,082 shares and 62,171 shares were paid out during the nine month periods ended October 3, 2026, and September 27, 2025, respectively.
Notes – PSU payouts timing/quantities · Filed 22/10/2026
32
In February 2026, after comparing the Company’s consolidated financial results for fiscal 2025 to the consolidated financial performance goals, the Committee approved no payout relative to the consolidated financial results component of the annual incentive plan.
Proxy – FY2025 consolidated bonus component paid 0% · Filed 12/03/2026
• We have executive stock ownership guidelines that cover all of the Company’s executive officers, including the NEOs;
Proxy – Clawback and related safeguards · Filed 12/03/2026
No amounts were borrowed or outstanding under the Credit Facility during the six months ended and as of July 4, 2026.
MD&A – No borrowings under $900m revolver · Filed 23/07/2026
Long-term debt of $887.0 million as of July 4, 2026, consisted of $400 million of unsecured 4.1% notes that mature on March 1, 2048, and $500 million of unsecured 3.1% notes that mature on May 1, 2050, partially offset by $13.0 million of unamortized debt issuance costs and issuance discounts.
MD&A – Long-dated unsecured notes outstanding · Filed 23/07/2026
In the first six months of 2026, Snap-on repurchased 508,000 shares of its common stock for $191.3 million under its previously announced share repurchase programs.
MD&A – Share repurchases 1H26 · Filed 23/07/2026
Recent Acquisitions
On June 8, 2026, Snap-on acquired Diesel Laptops, LLC (“Diesel Laptops”) for a preliminary cash purchase price of $99.7 million (or $99.1 million, net of cash acquired).
MD&A – Diesel Laptops acquisition (diagnostics/data) · Filed 23/07/2026
The operating results and assets of Hi-Force have been included in the Commercial & Industrial Group segment since the acquisition date.
MD&A – Hi-Force acquisition (torque/hydraulics) · Filed 23/07/2026
Board Leadership Structure
The Board has established the position of Lead Director to assist in overseeing the affairs of both the Company and the Board.
Proxy – Independent Lead Director role · Filed 12/03/2026
Our Chairman is also our Chief Executive Officer and thus is not an independent director.
Proxy – Combined CEO/Chairman rationale · Filed 12/03/2026
We expect that the level of competition will remain high in the future, which, if not effectively matched or exceeded, could limit our ability to maintain or increase market share or profitability.
Item 1A: Risk Factors – Competition expected to remain high · Filed 12/02/2026
Sales relating to any single patent did not represent a material portion of Snap-on’s revenues in any of the last three years.
Item 1: Business – No single patent material to revenue · Filed 12/02/2026
In general, as a manufacturer and marketer of premium products and services, the expectations of Snap-on’s customers and its franchisees are high.
Item 1A: Risk Factors – Premium brand positioning · Filed 12/02/2026
Net sales of $3,626.0 million in the first nine months of 2026 represented an increase of $114.7, or 3.3%, from 2025 levels, reflecting a $41.6 million, or 1.2%, organic gain, $37.1 million of acquisition-related sales, and $36.0 million of favorable foreign currency translation.
MD&A – 9M26 sales growth (organic, FX, M&A) · Filed 22/10/2026
